Kirchner Group Announces Several Crystallization events, including some from ‘Zombie’ Funds through its ‘Successor GP’ program

Published: March 26th, 2015

Successful completion of a fund-level mandate complemented by numerous liquidity events in other portfolios.

Birmingham, Alabama, March 26 2015 – Kirchner Group is pleased to report continued milestones from its proprietary platform which provides human and financial capital to bolster portfolios of private assets. Since pioneering the model in 2004, Kirchner Group has been successfully deploying its program across a series of portfolios ranging from early stage venture to mid-market buyout to most recently hedge funds. The Kirchner model has now been implemented with eight funds on behalf of more than 100 investors and representing 107 portfolio companies under the firm’s management. The program is flexible and designed to address a number of situations ranging from ‘zombie’ funds to orphaned portfolios to funds in various forms of transition. Human and financial capital is made available to replace prior GPs or work alongside incumbent GPs.

Kirchner Group has completed its management of Foragen Technologies Management Inc., an agricultural technology fund based in Canada. In March 2015 its final assets were crystallized resulting in a wind up of the fund. Kirchner Group managed this fund on behalf of Royal Bank of Canada and two provincial institutional investors. Under Kirchner’s management, three of Foragen’s companies were sold to major strategic acquirers; one for approximately $500M. Another holding grew into a market leader in its sector.

“Bud and his team did an excellent job taking over a declining situation, turning things around and managing this portfolio to its successful completion. It is comforting to know that this resource exists for investors and managers seeking to get portfolios back on track” commented Gaetan Lussier Chairman of the Foragen Board. “The proven processes and creativity employed by the team were the difference between wins and losses here. I have no doubt that bringing the Kirchner team into this portfolio when we did, resulted in significant value being created and distributed back to investors.”

In 2011 Kirchner Group took over Emerald Partners V (previously managed by Brantley Partners). During the last 12 months Kirchner Group has monetized Jet-Lithocolor through a sale to a strategic acquirer as well as Dwellworks LLC through a recapitalization from its portfolio. Kirchner Group has also previously exited investments in Sterling Bank & Trust and Information Storage Consolidation Company (ISCC), LLC within the portfolio. Emerald Partners V, a diversified mid-market Private Equity Fund, includes some of the largest insurance companies and institutional investors in the world as its Limited Partners.

Crestline-Kirchner Private Equity Group, a joint venture established around the ‘Successor GP’ program between Crestline Investors and Bud Kirchner, Founder and CEO of Kirchner Group also recently completed its first exit from the CK Pearl Funds (formerly Medley Opportunity Fund I). Portfolio Company Bennu Glass, LLC was recently acquired by Owens Illinois. The CK Pearl Funds have diverse holdings spanning several asset classes in numerous countries. The CK Pearl Funds manage capital on behalf of a wide range of primary and secondary institutional hedge fund investors.

Kirchner Group has a long track record of crystalizing value in the portfolios they manage as a ‘Successor GP’ including supporting the deal for Alexion to Acquire Enobia Pharma for Up to $1.08 Billion. Enobia was a portfolio company in Lothian Partners 27 (Sarl) SICAR. Kirchner Group managed Lothian on behalf of one of the largest secondary private equity funds in the world.

“These events illustrate the depth and breadth of our involvement with this asset class. We are pleased to have returned significant capital to our investors through this program.” stated WB (Bud) Kirchner, Founder of the Kirchner Group and Co-Founder of Crestline Kirchner Private Equity Group. “We believe that all portfolios have underlying value and pioneered this model over 10 years ago to execute on this core philosophy. We are very pleased to have been able to continually provide the tangible results that our clients have come to expect from all of Kirchner Group’s activities.”

Crestline-Kirchner, in association with Morrison Foerster, is co-hosting a webinar on March 31st discussing Manager Transitions: Re-Establishing Alignment of Interest and Skillsets in Private Assets. For more information please contact David Philipp.

Kirchner Group
The Kirchner Group believes that every business, and every portfolio of businesses, can be made more valuable and that none should become valueless, regardless of the circumstances. Kirchner Group’s proprietary platform is built on the premise that pairing deep domain expertise with process experts provides superior results. Kirchner Group has provided traditional merchant banking services since 1985 and offers advisory, operational and transactional support to companies as well as asset management services for institutional investors. The group’s clients and partners range from promising entrepreneurs to Fortune 500 companies and their investors. Kirchner Group also manages assets for some of the largest insurance companies, commercial banks and institutional investors in the world. www.kirchnergroup.com

Crestline-Kirchner Private Equity Group
Crestline-Kirchner Private Equity Group was formed in 2013 as a joint venture between Crestline Investors, Inc. and Bud Kirchner, founder of the Kirchner Group, who brings a long track record of executing this ‘Successor GP’ strategy and is often credited as its pioneer. Crestline-Kirchner acquires and manages portfolios of private assets made available through restructurings, orphaned portfolios, manager transitions, end of fund life scenarios and related special situations. The joint venture allows Crestline-Kirchner to deliver experience-driven entrepreneurial solutions within the operational framework of an institutionally scaled and regulated platform. In addition to the investment professionals within the joint venture, Crestline-Kirchner also leverages the complimentary resources that are not part of the joint venture from both firms.